With concerns over the euro zone economy shifting from peripheral to core member states in 2014, can the ECB rescue prospects for a better 2015 with a hotly-awaited programme of QE? David Pollard reports.
Time for the euro zone's end of year school report. 12 months ago, it was a grade D for periphery debt - but perhaps, a GOOD for effort. Now, it's still a D - but for deflation. With, possibly, another D for depressing. Robert Kuenzel of Daiwa Capital Markets. SOUNDBITE (English) ROBERT KUENZEL, DIRECTOR, EURO AREA ECONOMIC RESEARCH, DAIWA CAPITAL MARKETS, SAYING: ''It doesn't seem justified to be expecting a particularly strong acceleration in growth next year compared to what we've seen this year.'' Deflation could hit everyone. These farmers say falling milk prices are putting them out of business. On the macro level, Greece is right at the top of the worry list again - but so too are euro zone core members. France and Italy and their struggle to reform - and control their budgets. And now, even, Germany. Jeremy Batstone-Carr, Director Private Client Services, Charles Stanley. SOUNDBITE (English) JEREMY BATSTONE-CARR, DIRECTOR PRIVATE CLIENT SERVICES, CHARLES STANLEY, SAYING: ''It appears to me that the data is implying that there may potentially be weak demand from within Germany itself. Therefore, my fear is that the euro zone economic engine room is sputtering as well.'' Hopes for a better 2015 could be summed up in two other letters: QE. But the ECB and its chief Mario Draghi have been masterful at talking up the possibility of ECB stimulus - without much stimulus. He may not want to fire what many view as his last silver bullet for a while yet. Oil prices could help. Their slide's making hard-pressed consumers feel a bit richer. But with pitfalls. SOUNDBITE (English) ROBERT KUENZEL, DIRECTOR, EURO AREA ECONOMIC RESEARCH, DAIWA CAPITAL MARKETS, SAYING: ''The continuing fall in oil prices does raise a significant negative headline inflation in the euro area at some point in the months to come.'' And without reform, it's argued, QE may not work anyway. Some form of new deal is what's needed, according to Philippe Gijsels of BNP Paribas Fortis. SOUNDBITE (English) PHILIPPE GIJSELS, CHIEF STRATEGY OFFICER, BNP PARIBAS FORTIS, SAYING: ''We're still hoping ... that 2015 will be the year of a big bargain, where the ECB injects more liquidity in the system, where Germany gets to spend a bit more, and France sees some more restructuring.'' Without it, 2015 could see the euro zone's economy cooling even further, the temperature going in the opposite direction for those already in the political hot seat.